1 00:00:00,120 --> 00:00:02,440 Speaker 1: Well, can you feel a vibate? The business confidence numbers 2 00:00:02,480 --> 00:00:04,920 Speaker 1: from the Ainsage Regular survey have exploded to their highest 3 00:00:04,960 --> 00:00:08,639 Speaker 1: levels in a decade. General sentiment rows twenty three points, 4 00:00:08,640 --> 00:00:11,440 Speaker 1: best results since May of fourteen. The chief economists today 5 00:00:11,440 --> 00:00:14,760 Speaker 1: and Zed Sharon's olders were the Sharon Morning, Good morning, 6 00:00:14,840 --> 00:00:17,639 Speaker 1: so important to point fifty one plus fifty one, so 7 00:00:17,680 --> 00:00:19,560 Speaker 1: we're above fifty it's a low base. 8 00:00:21,000 --> 00:00:24,400 Speaker 2: Well, yeah, essentially these questions are asked relative to today, 9 00:00:24,560 --> 00:00:26,239 Speaker 2: and we have a question in there about how the 10 00:00:26,320 --> 00:00:29,880 Speaker 2: last last month has gone. That's there's a net twenty 11 00:00:29,920 --> 00:00:32,320 Speaker 2: one percent firm saying that activity was lower than a 12 00:00:32,400 --> 00:00:35,120 Speaker 2: year earlier. So the bar for improvements from that point 13 00:00:35,360 --> 00:00:36,240 Speaker 2: is fairly lot. 14 00:00:37,120 --> 00:00:39,680 Speaker 1: Were you surprised by the size of the jump though, 15 00:00:40,040 --> 00:00:43,720 Speaker 1: It just strikes me we're desperate for something. We've seen 16 00:00:43,760 --> 00:00:45,559 Speaker 1: Adrian do a bit of there's maybe some life in 17 00:00:45,560 --> 00:00:48,519 Speaker 1: the economy, whatever, and then you know, we're happy. 18 00:00:50,280 --> 00:00:52,000 Speaker 2: You know, I think I think it is a really 19 00:00:52,120 --> 00:00:56,800 Speaker 2: positive sign. It's the first reaction obviously to a lower rate, 20 00:00:56,880 --> 00:00:58,800 Speaker 2: so the Reserve Bank only cut rates in the middle 21 00:00:58,840 --> 00:01:02,120 Speaker 2: of the month. These higher results were evident already at 22 00:01:02,120 --> 00:01:04,360 Speaker 2: the very start of the months, but already by then 23 00:01:04,440 --> 00:01:06,759 Speaker 2: we were seeing falls and wholesale rates. We were seeing 24 00:01:07,160 --> 00:01:09,720 Speaker 2: con spring forward their forecasts for when cuts would come. 25 00:01:09,760 --> 00:01:12,679 Speaker 2: So the whole visor of the discussion had changed to 26 00:01:13,040 --> 00:01:15,319 Speaker 2: the idea that rates cuts were coming very soon. So 27 00:01:15,319 --> 00:01:17,080 Speaker 2: I think certainly that had a huge amount to do 28 00:01:17,160 --> 00:01:17,840 Speaker 2: with these results. 29 00:01:17,840 --> 00:01:19,840 Speaker 1: Actually, before I forget what's your vibe, I noted the 30 00:01:19,840 --> 00:01:21,920 Speaker 1: other day the Bank of England's cut once and they 31 00:01:22,120 --> 00:01:25,480 Speaker 1: they're claiming they've seen a material difference and change in 32 00:01:25,520 --> 00:01:28,920 Speaker 1: the housing market after one cut. Would you expect something 33 00:01:28,959 --> 00:01:29,679 Speaker 1: similar here or not? 34 00:01:30,520 --> 00:01:32,080 Speaker 2: Well, if you just look at the level of rates, 35 00:01:32,080 --> 00:01:35,120 Speaker 2: you say, no, that's ridiculous. But there is a threshold 36 00:01:35,160 --> 00:01:37,160 Speaker 2: and crossed. A switch has been selected of people who 37 00:01:37,200 --> 00:01:39,360 Speaker 2: are thinking of buying a house now are thinking, okay, well, 38 00:01:39,400 --> 00:01:42,039 Speaker 2: if I can handle the rates today, then I'm good. 39 00:01:42,400 --> 00:01:45,080 Speaker 2: Whereas you know, even just two months ago they were thinking, well, 40 00:01:45,080 --> 00:01:47,080 Speaker 2: we don't know if rates could go higher. I don't know, 41 00:01:47,400 --> 00:01:49,200 Speaker 2: this is all. I'm very uncertain. I'm not sure I 42 00:01:49,200 --> 00:01:51,640 Speaker 2: can take that risk. There is certainly a perception that 43 00:01:51,680 --> 00:01:54,440 Speaker 2: the risk of higher rates is out the window and 44 00:01:54,480 --> 00:01:56,880 Speaker 2: that better times are just a question of time. So 45 00:01:57,280 --> 00:01:59,880 Speaker 2: I don't think it's unquestionable at all. I don't think 46 00:01:59,880 --> 00:02:02,440 Speaker 2: it's unlike unlikely that the first cut is the deepest. 47 00:02:02,440 --> 00:02:04,840 Speaker 2: To quote Rod Stewart that that the turn in the 48 00:02:04,920 --> 00:02:08,840 Speaker 2: cycle is in and of itself quite important. So we'll 49 00:02:08,840 --> 00:02:11,720 Speaker 2: be watching things like the auction clearance rate for Bartht 50 00:02:11,760 --> 00:02:14,280 Speaker 2: and Thompson. That that's where you get the most the 51 00:02:14,280 --> 00:02:17,079 Speaker 2: most leading information, and that has actually ticked up a 52 00:02:17,120 --> 00:02:18,880 Speaker 2: little bit the last couple of weeks. It's not high. 53 00:02:19,200 --> 00:02:20,280 Speaker 2: I do you definitely find. 54 00:02:20,440 --> 00:02:22,720 Speaker 1: I do love an economist who quotes Rod Stewart. The 55 00:02:23,360 --> 00:02:27,359 Speaker 1: pricing intentions rose. Is that a concern or not inflation 56 00:02:27,440 --> 00:02:28,120 Speaker 1: really speaking? 57 00:02:28,560 --> 00:02:31,400 Speaker 2: Yeah, well, it was disappointing. We saw both the proportion 58 00:02:31,480 --> 00:02:33,920 Speaker 2: of firms saying they're going to raise their prices imminently 59 00:02:34,000 --> 00:02:35,960 Speaker 2: and the amount by which they intend to raise them. 60 00:02:35,960 --> 00:02:37,720 Speaker 2: Both of those ticked up for the second month in 61 00:02:37,760 --> 00:02:40,040 Speaker 2: a row. If you sit back and look at the chart, 62 00:02:40,080 --> 00:02:43,520 Speaker 2: it's pretty clear there's a strong downward trend. But those 63 00:02:43,560 --> 00:02:46,440 Speaker 2: things do need to fall further to be consistent with 64 00:02:46,520 --> 00:02:49,880 Speaker 2: the Reserve banks inflation expectations, So it'd be nice to 65 00:02:49,880 --> 00:02:52,200 Speaker 2: see a drop next month. But you know, the cost 66 00:02:52,240 --> 00:02:55,880 Speaker 2: measures were also very, very sticky, So you know, I'd 67 00:02:55,880 --> 00:02:58,160 Speaker 2: say that the Reserve Banks has stopped the antibiotics a 68 00:02:58,200 --> 00:03:00,760 Speaker 2: day early, perhaps compared to what there is Earlier forecast 69 00:03:00,800 --> 00:03:03,680 Speaker 2: had suggested they've got fewer runs on the board and 70 00:03:03,720 --> 00:03:06,679 Speaker 2: except my metaphors completely. Then they said they were going 71 00:03:06,680 --> 00:03:10,040 Speaker 2: to need That's not an unreasonable thing to do because 72 00:03:10,160 --> 00:03:13,120 Speaker 2: the growth is looking weaker than they thought. But you know, 73 00:03:13,240 --> 00:03:15,119 Speaker 2: they've taken a bit of a pump. There weren't any 74 00:03:15,200 --> 00:03:19,080 Speaker 2: risk free choices they could have made this month. But 75 00:03:19,160 --> 00:03:21,040 Speaker 2: it does mean that we're all going to be watching 76 00:03:21,360 --> 00:03:23,800 Speaker 2: the data with even greater interest than normal. 77 00:03:23,960 --> 00:03:25,680 Speaker 1: Ain't that the truth? You have a good weekend as well. 78 00:03:25,720 --> 00:03:28,959 Speaker 1: Sharing's on AMZ Chief Economists. For more from the Mic 79 00:03:29,040 --> 00:03:32,160 Speaker 1: Asking Breakfast, listen live to news talks they'd be from 80 00:03:32,240 --> 00:03:35,680 Speaker 1: six am weekdays, or follow the podcast on iHeartRadio.